Tax FAQ Series -Should I use a Schedule C or a Schedule E?

There are a lot of options when it comes to reporting income and expenses. Schedule C’s and Schedule E’s are the most familiar to taxpayers (and many tax preparers). But, BEWARE. These forms are considered “suspect” by the IRS and are subject to verification and a potential audit when it’s reported by an individual taxpayer. In fact, your audit risk when you use a Schedule C or E is much higher than when the same information is reported on a separate business return. So if you have business income and expenses or rental properties, report the information on a separate business return, not a schedule C or E if at all possible.

If you need assistance forming your business entity or filing your tax return, contact us today at (480) 888-7111 to schedule your free consultation.


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